Can green entrepreneurs save our planet?

Profits and Sustainability :A History of Green Entrepreneurship

Less than a year after the governments of the world came together to sign the Paris Agreement on climate change, the United States has inaugurated a new president, Donald Trump, who denounces the whole idea as a Chinese hoax. How did we get here?

Historically, environmental concerns have been more cyclical than linear. They began in earnest during the nineteenth century as industrialization spread across the Western world. In the United States, conservation movements led to the creation of Yellowstone National Park, the world’s first national park, in 1872. In 1892 the Sierra Club, still an important environmentalist NGO, was founded in San Francisco.

Then the world lost interest. Two world wars, the Great Depression, and the Cold War diverted attention from ecology, despite sporadic warnings from scientists—who were mostly dismissed as cranks. Most politicians around the world were more concerned with keeping living standards growing and food on the table, regardless of environmental externalities.

A fresh start came in the 1960s, as writers like Rachel Carson found new ways to tell the world about environmental challenges in language and images that non-scientists could understand. In 1970 hundreds of thousands demonstrated their concerns on the first Earth Day. Nothing much happened in policy terms until the 1980s, when a few pioneering governments began to introduce subsidies and feed-in tariffs for renewable energy, recycling waste, and organic agriculture. But the road was long to reach this point.

There are a set of characters who, until now, have not been widely recognized in histories of environmentalism. Nevertheless, beginning in the nineteenth century, they devoted their livelihoods to reducing the externalities of industrial growth at a time when few cared or understood. Even more unusually, given the traditional consensus among environmentalists that business was the primary cause of environmental degradation, these people were green entrepreneurs who believed that for-profit business could foster sustainability rather decimate it.

Pirris Dam under construction in 2011 by the Costa Rican Institute of Electricity (ICE) by Ceab.ico. CC-BY-SA-4.0 via Wikimedia Commons.

This pioneering cohort focused their attention on the health of humanity, both physical and spiritual. Figures such as Sylvester Graham (the creator of the Graham cracker) and John Harvey Kellogg (creator of the breakfast cereal) warned of the risks of applying chemistry to agriculture and of processed foods, and they sought to offer healthier alternatives. Their German counterparts, such as Benedict Lust, preached the benefits of healthy food and lifestyles. Lust transferred both German naturopathic ideas and Indian Ayurvedic concepts to the United States, even as he was harassed for his nudism and other eccentric ideas. Lust’s perceived eccentricities were modest compared to those of Rudolf Steiner, the founder of anthroposophy, who from an early age talked to dead people. Yet it was he who laid down the principles of organic agriculture, sustainable finance, ecological architecture, and Waldorf schools, providing a worldview which has continued to inspire green entrepreneurs to the present day.

These figures, and their successors in the twentieth century, met little financial success. It has rarely paid to be green. Quite a few went bankrupt. Motivated more by spirituality and alternative world views than profit, they persisted even as the world laughed at them.

Financial failure did not mean they had no impact. By the late twentieth century green entrepreneurs had imagined worlds that did not exist yet and made multiple innovations designed to make them realities. They developed organic food products and farming methods, solar and wind energy technologies, eco-lodges and sustainable finance, and much else.

In the new millennium, the case would seem to have been made. Governments have finally become facilitators rather than obstacles to green industries. Some were finally convinced to support renewable energy on a massive scale. Denmark now gets two-fifths of its electricity from renewables, and Costa Rica 100%. Government-supported firms in China have dramatically reduced the cost of solar panels.

In reality, as the continued deterioration of planetary fundamentals shows, we were still far from planetary nirvana. The greening of large corporations is all too often more a matter of rhetoric than reality. Chief executives are mostly incentivized to pursue incremental strategies which may reduce environmental impact, but also to continue to engage in core businesses activities which adversely impacted the planet. The scaling of green firms raises problems, too. As organic retailers sell more organic food, it is transported around the world, raising the carbon footprint. Government policies are rarely consistent for long, resulting in boom-and-bust cycles in renewable energy and incentives for rent-seeking rather than sustainability. And now, under Donald Trump, the United States is rushing to turn back the clock on environmental protection.

As climate change deniers, fossil fuel enthusiasts, and other throwbacks to a past age take control of policy-making in what remains (for the moment) still the world’s largest economy, the need for a new generation of green entrepreneurs has never been greater. They offer the best promise of achieving the radical innovation, both in technology and mindset, needed to move the world forward. Their fortunes remain precarious, and their task has got harder in a greenwashed world, but by a willingness to be “crazy” and to think outside of traditional boxes, green entrepreneurs may be our best shot at saving the planet.

Geoffrey Jones is the Isidor Straus Professor of Business History at the Harvard Business School. Professor Jones researches the evolution, impact, and responsibility of global business. He is a Fellow of the Academy of International Business and Fellow of the Royal Historical Society. He is the author of Profits and Sustainability :A History of Green Entrepreneurship.

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